R&D Tax Credit for Aero
space
Aerospace is one of the most technologically demanding industries worldwide. Companies researching new propulsion systems, lightweight structures or avionics can reclaim up to 25% of R&D personnel costs as a tax credit.
- •Aerospace companies can reclaim up to 25% of R&D expenditures as a tax credit.
- •Eligible: engine development, new composite materials, avionics, satellite technology, additive manufacturing.
- •For university collaborations: assessment base up to €15 million (up to €3.75 million reimbursement).
- •International consortia (e.g. ESA): the German company's own R&D contributions are eligible.
Aerospace: Maximum R&D Intensity
The aerospace industry, with an R&D intensity of over 11% of revenue (BDLI, 2024), is among the most research-intensive sectors. At the same time, it is subject to the strictest certification requirements (DO-178C, DO-254, EASA Part 21) -- each of these requirements creates technical uncertainties that are eligible under the FZulG.
A particular advantage: Military and dual-use research is also eligible, provided the projects meet the Frascati criteria. The BSFZ evaluates the research character, not the application. Projects within ESA or EU framework programs can also claim the R&D tax credit in addition.
Typical reimbursement volumes are €300,000--€1,200,000 per year -- especially for suppliers with specialized development teams for avionics, engine technology or satellite components.
What is funded in
Aerospace?
These project types are typically eligible under FZulG §2 -- provided technical uncertainty existed and the goal was not achievable with existing methods.
Propulsion Systems & Engines
Development of new engine concepts, hybrid drives or electric propulsion systems for aerospace applications with superior thrust-to-weight ratio or emission characteristics.
Lightweight Construction & Structural Mechanics
Development of novel lightweight structures, fibre composite concepts or additively manufactured structural components for aerospace fuselages, wings or housings.
Avionics & Flight Control Systems
Development of novel avionics systems, flight control algorithms or navigation solutions enabling new levels of autonomy or safety in aviation.
FZulG Criteria for
Aerospace Projects
Activities at TRL 1 to approx. 6 (technology demonstration) are typically eligible; from TRL 7+ serial development predominates.
Test stand trials, wind tunnel test iterations and simulation cycles document the technical uncertainty.
The project generates new knowledge that goes beyond existing certification and qualification requirements.
Pure DO-178C/DO-254 compliance activities are not eligible; the preceding development phase is.
Dual-use technologies (civil and military application) are generally eligible under the FZulG provided they are deployed in the civil sector. Clear documentation of the civil use case is required.
Eligible roles: aerospace engineers, fluid dynamicists, avionics developers and contract research at DLR or universities (70%).
Typical funding per aerospace project: €500,000 -- €5,000,000/year
Development of novel lightweight materials. NOVARIS documented the experimental uncertainty in material properties.
4+ projects managed, 100% approval rate.
Without vs. with NOVARIS -- Typical Difference
Illustrative example based on average client results. Actual results may vary.
Industry-Specific Requirements in Aerospace
The aerospace industry is subject to the strictest development standards of any sector -- and consequently generates particularly extensive R&D documentation. DO-178C (Software) and DO-254 (Hardware) require a rigorous development and verification framework with demonstrable test coverage levels. The development artifacts required -- Software Requirements Specifications (SRS), Design Description Documents (SDD), Verification and Validation Reports, Structural Coverage Analyses and Traceability Matrices -- are largely usable as R&D evidence for the BSFZ. Particularly at Certification Levels A and B (DAL A/B), the R&D effort is enormous.
Flight testing and qualification tests are prime examples of experimental development. Flight tests for expanding the operational envelope (Flight Envelope Expansion), flutter tests, structural load tests per CS-25 Subpart C and engine certification tests per CS-E generate systematic test data under controlled conditions with inherent technical uncertainty. Ground tests such as fatigue testing, bird strike simulations and lightning strike qualifications are also eligible.
The development and qualification of fibre composite materials (CFRP, GFRP) for primary structures is a particularly eligible area. Material property determination (A-basis, B-basis values), process development for autoclave and out-of-autoclave methods, impact damage tolerance studies (BVID, VID) and the development of novel repair procedures require extensive test series. Material qualification according to NADCAP standards generates comprehensive test documentation that directly serves as R&D evidence.
EASA certification (European Union Aviation Safety Agency) is a multi-layered process containing significant R&D components. Whether Type Certificate (TC), Supplemental Type Certificate (STC) or European Technical Standard Order (ETSO) -- demonstrating compliance with Certification Specifications requires innovative analysis methods, test stand development and validation concepts. Our aerospace consultants understand the interfaces between certification processes and R&D and systematically maximize the eligible assessment base.
Typical Funding Amounts in Aerospace
Calculation Example: Avionics Supplier with DO-178C Development
- • 10 software engineers DAL-A certification (gross salary: €950,000)
- • R&D portion (approx. 65%): €617,500
- • Contract research test laboratory: €150,000 (70% = €105,000)
- • R&D tax credit (25%): €180,625 / year
Calculation Example: Composite Structure Developer
- • 6 materials scientists and test engineers (gross salary: €510,000)
- • R&D portion material qualification (approx. 70%): €357,000
- • Annual R&D tax credit: €89,250
Typical Eligible Aerospace Projects
Frequently Asked Questions
Further Resources on the R&D Tax Credit
Deepen your knowledge with our specialized resources:
Specific Requirements in Aerospace
EASA regulation, extreme operating conditions, and the highest safety requirements make aerospace one of the most R&D-intensive industries – with corresponding funding potential.
Industry benchmark: The German aerospace industry employs over 117,000 people and invests approximately €5.5 billion annually in R&D (BDLI, 2024). With an R&D intensity of over 12%, the sector is one of the most research-intensive in Germany.
